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Chorus Aviation Q3 adjusted EBITDA $65.1 million

Staff writer |
Chorus Aviation announced strong third quarter 2015 earnings that included the achievement of its highest third quarter EBITDA and operating income since 2010, excluding the Voyageur operation.

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In the third quarter of 2015, Chorus generated adjusted EBITDA of $65.1 million excluding a foreign exchange loss of $27.5 million on US denominated debt.

The strong performance represented by an $8.9 million increase in adjusted EBITDA over the third quarter of 2014 takes into account a $9.7 million increase in operating income; offset by a quarter-over-quarter net $0.8 million decrease in depreciation and amortization expense.

This decrease in depreciation and amortization was mainly attributable to a change in the estimated economic useful lives and residual values of certain owned aircraft and flight equipment in the first quarter of 2015 of $4.1 million, and major maintenance overhauls of $0.3 million; offset by the purchase of additional aircraft during 2015 for $0.2 million and a $3.4 million increase in depreciation and amortization expense attributed to Voyageur which contributed $4.8 million in adjusted EBITDA in the quarter.

For reporting purposes, at each quarter, Chorus converts its US dollar denominated aircraft debt into equivalent Canadian dollars based on the prevailing exchange rate.

Chorus manages its exposure to currency risk on such long-term debt by billing related lease payments under the CPA with Air Canada in the underlying currency (US dollars) related to the aircraft debt.

As a result of this conversion, in the third quarter of 2015, Chorus had an unrealized foreign exchange loss of $25.1 million versus an unrealized foreign exchange loss of $17.8 million in the same period of 2014.

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